Make Taxes Less Taxing
The Modi government promised to make tax laws more transparent and less complex. The revenue secretary, today, is Hasmukh Adiha, a Gujarat cadre IAS officer who is close to the prime minister. However, Indian tax laws are so outdated, and their application so mindless, that there is no dearth of issues affecting taxpayers. In our Cover Story, Ameet Patel, a chartered accountant who has written several outstanding articles for Moneylife, highlights five main areas on which the government can focus, to make income-tax less cumbersome. From the tedious TDS (tax deducted at source) to income-tax notices sent out to 80-year-olds for not filing taxes, to the ever-changing income-tax return forms and difficulty in dealing with any change in PAN records, these issues cost individuals a lot of time and effort. Will the government introduce reforms that save individuals from 
tax torture?
It’s been nearly a quarter century since the 1992 securities scam and the cases are still continuing. On 30th October, Justice Roshan Dalvi delivered a judgement in what should have been among the first scam cases to be decided. Sucheta, in Crosshairs, points out that innocent bankers have been convicted and sentenced to rigorous imprisonment while brokers, who can afford better and more expensive lawyers, have been acquitted.
In Different Strokes, Sucheta writes on the never-ending menace of chain-money schemes which have now got the attention of the parliamentary standing committee on finance. The committee recommends new legislation to deal with this large-scale looting of public money. Unfortunately, existing laws have not been effectively enforced. Recommendation of a new statute and special courts sounds good on paper, but it is unclear how it will work in practice.
Moneylife has, often, highlighted that investing in real estate is a bad option. 
R Balakrishnan, in his article, gives a few solid reasons on why you should avoid real estate as investment. From all of us here at Moneylife, wish you and your family a Happy Diwali!


Hyundai to unveil self-driven car in December
South Korea's top automaker Hyundai Motor Co. is set to unveil its first self-driven vehicle in December, a media report said on Monday.
Hyundai plans to roll out the latest version of its "Genesis" luxury sedan equipped with the so-called highway driving assist (HDA) system.
The HDA system is designed to keep a car within the lane, maintain a safe distance from the car ahead and provide a navigation-connected system that gives warnings of maximum and minimum speeds on highway sections, Yonhap News Agency reported.
It is designed to enhance the driver's ability to cope with diverse situations that could happen on highways.
A Hyundai official said the company's launch of the model will usher in the era of autonomous driving in South Korea.
According to the official, Hyundai plans to apply the autonomous driving function to its other vehicles from 2020, which will "maximize" the safety for drivers in numerous road conditions.
The planned launch is part of Hyundai Motor's efforts to develop next-generation smart cars that combine automated driving with high-tech features. 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


Fix the Informal Economy!
This is with regard to “Beyond the Black Money Bill” by Sucheta Dalal. The article has brought out the problems with respect to generation of black money. The Black Money Bill, aimed at bringing back black money stashed abroad, has not served the purpose. The declared amount is a pittance. Still, something is better than nothing. 
The generation of black money needs to be plugged. The enforcement authorities have to concentrate on the following areas involving professionals from different fields. One way of obtaining information is to have a channel opened for people to freely report when they come across black money deals, giving some evidence or some trace of it. The areas where vigilance is required to prevent black money generation and money laundering are as under:
  1. Allowing corporates to float any number of subsidiaries without any valid reason. These subsidiaries enable holders of black money to have some avenues of investments and both the holding companies and subsidiary companies declare losses routinely without being seriously probed by any authority. SEBI (Securities Exchange Board of India) should be vigilant and alert in preventing floating of such companies.
  2. Imports and exports: Bank of Baroda (Ashoknagar branch in Chennai) is an example of how companies are allowed to open accounts freely without adherence to KYC (know your customer) norms or any other regulatory prescription. This must have been going on in several branches in a camouflaged manner as branch inspections are not carried out by the regulator these days. Liberalisation of regulation is essential but it should not lead to loot or indiscipline in conducting the affairs. There should be sufficient checks & balances.
  3. Real estate: Black money is easy to invest in real estate. Unsold flats in various cities are a clear indication of the volume of black money held in real estate. RBI (Reserve Bank of India) policy rate cut cannot have any serious impact on the real estate prices, as holders of black money and banks, which have financed these real estate players, are not affected by such policy measures.
  4. Purchase of farm lands and forming farm clubs in and around major cities has become a fashion these days; black and white money flows to these farm clubs. White money gets converted into black money and banks are also involved. The fact that the amounts are paid through banks does not mean that the money is white. 
  5. Purchase of gold, jewellery and other high-cost commodities: The dealers invariably insist on black money and they never entertain cheque or card payments. The income-tax authorities can visit bullion merchants incognito and experience it for themselves.
  6. Dealers in furniture, furnishing houses spread over the entire country: They always insist on cash and they seldom take cheque or cards.

The list goes on; if the authorities can really be after them, the financial system in the country can be very clean and the revenues of the government can be augmented several times. 

The informal economy, which is larger and bigger than the formal economy, needs to be fixed. The earlier it is done the better.
Gopalakrishnan TV, online comment

Coin shortage

This is with regard to the recent letter to the editor “Do chocolates constitute coins (legal tender)?” by BV Krishnan in Moneylife (Issue dated 17 September 2015). 
The near acute shortage of coins in circulation is due to the following factors:
a) Small coin depots are maintained by the State Bank of India (SBI).
b) Of late, RBI (Reserve Bank of India) has reduced the number of counters in its offices where people can exchange currency notes and coins. Thus issue of coins got restricted.
c) Coins are issued by the Government of India. RBI and SBI are only agents of the government.
d) Small coins up to Re0.50 have been discontinued by the government of India.
e) Some people stand in line at RBI and obtain coins and ‘help’ those outside the bank, who are in need of coins, for a small ‘fee’.
f) RBI has designated some banks to supply coins to the public. The banks, in turn, select some of their branches to do the job. The branches are hard-pressed for staff and think that it is a nuisance that is best avoided. They undertake the work only on some days and that, too, for selective customers. As no notice is displayed at the branches, the public hardly know about it and never dare to demand coins.
I hope that now you know who is responsible for the shortage of small coins. Retail traders have no recourse other than to issue chocolates (Re1 each) to their customers, who do not tender the exact amount.
P Ramachandra Rao, Hyderabad

Celebrity Shareholder?

This is with regard to “Stock manipulation: Stampede Capital”. The company has a celebrity shareholder. 
There have been great capital gains for that shareholder. It has been a big bargain for the big shareholder.
R Balakrishnan, online comment

Where is The Well-Being?

This is with regard to “Buy stocks of consumer products companies, not their products” by R Balakrishnan.  Excellent article! Mindless consumerism makes life pathetic. Thank God for giving some people the wisdom to write such an article. Perhaps, some policy-makers, sitting in high offices, would read it and get enlightened. Frugal and simple living and high thinking is what is required to live a fulfilling life. Anyway, the current of human collective wisdom is flowing down the drain and enlightenment will come after all is wasted. This economy looks like it has great GDP figures but where is the well-being?
SK Gupta, by email

HFT Should Be Banned!

This is with regard to “High Frequency Worries over HFT” by Sucheta Dalal. I am glad Moneylife has taken up this issue. HFT (high frequency trading) is one of those Western evils that have been blindly copy-pasted into India for the benefit of select vested interests. It needs to be banned entirely.
Chandragupta Acharya

Prime Minister’s Schedule 

This is with regard to “Beyond the Black Money Bill” by Sucheta Dalal. Since every decision in this regard is taken by the prime minister and is communicated through the prime minister’s office (PMO), it would be helpful for the PM to spend some time in Delhi. At present, he is either campaigning in states where elections are being held, or he is visiting a foreign country asking for FDI (foreign direct investment) and hobnobbing with NRIs (non-resident Indians) or celebrities.
Meenal Mamdani

Keep It Up!

This is with regard to “Insurance & Pension: Unclear Tax Rules Will Destroy Your Returns” by Raj Pradhan. Wow! What a comprehensive article, even for a seasoned insurance intermediary like me! It took me a while to understand all that you have written. There is a lot of confusion and nobody really knows what is right or wrong. Everybody is free to interpret the laws, as they deem fit, which is likely to be further confusing to the poor investor. Moneylife is like a beacon of hope for the retail and small investor. Keep it up!
Deepak R Khemani

Words of Wisdom

This is with regard to “Shortlisting Good Stocks” by R Balakrishnan. One humble request: if you could write an enlightening article on Indian pharma companies—opportunities, threats and how to manage risk. Because, every now and then, some Indian pharma company gets a savage cut to its market-cap due to the United States Food and Drug Administration’s (USFDA) notice on non-compliance. Sustainability is a big issue. You never know when you might get struck by a bolt from the blue. I would appreciate some words of wisdom.
Abhijit Joshi

Amma Daycare?

This is with regard to “Retirement Homes Offer No Peace for Seniors” by Sucheta Dalal. It is a sad situation for our seniors who have worked so hard. The Tamil Nadu chief minister should do something as an initiative for other states, AMMA DAYCARE.
Sunil Kumar Hemnani



Hemen Parekh

11 months ago

Thank You , Policy Makers !

Dear Policy Makers :

I just came across following news report:


Financial Intelligence Unit to generate reports on black money suspects in 72 hours

( Source : Economic Times / 22 Nov 2015 )


Government has bolstered the capabilities of the elite Financial Intelligence Unit (FIU), which can now dish out volumes of data on suspicious transactions in 72-hours flat and gain access to

" secret database of offenders maintained by various law
enforcement agencies in the country. "

Earlier, when an agency wanted to get any information on financial transactions and other similar details on entities on its scanner the time taken used to be between a fortnight to 20 days.

The elite financial snoop wing under the Union Finance Ministry has switched to

full electronic mode for exchange of data,

from the earlier existing paper-based pattern, with all probe and enforcement agencies of the country like the Income Tax department, CBI, ED, DRI and Intelligence Bureau among others, beginning November 1.


Thank you for listening - and acting on my following suggestion , sent to you sometime back

( Source : > Blogs / E - Governance / 03 April 2014 )

E - Governance ?

Can e-Governance help eliminate corruption ?

Most certainly

Look at the following , partial list of Central and State Agencies set up to fight fraud , money-laundering , corruption , tax-evasion , economic crimes etc :

* Public Accounts Committee ( PAC )

* Central Vigilance Commission ( CVC )

* Central Information Commission ( CIC )

* Research and Analysis Wing ( RAW )

* Serious Fraud Investigation Office ( SFIO )

* Information Bureau ( IB )

* Economic Offence Wing ( EOW )

* Central Bureau of Investigation ( CBI )

* Department of Revenue Intelligence ( DIR )

* Comptroller and Auditor General ( CAG )

* Anti Corruption Bureaus ( States ) ( ACB )

* Enforcement Directorate ( ED )

* Lok Ayukts ( States )

* Lok Pal ( Central )

Despite such an army of Agencies , how do corrupt manage to get away ?

Or , in case caught , manage to delay delivery of punishment for years ?

No doubt , there must be several reasons , including , inter - agency rivalry to get credit - something difficult to eliminate altogether

But , I believe , the most important reason is :

Lack of a COMMON / COMPUTERIZED database of all offences / cases / persons being investigated,

- which is readily " Accessible " to all of these Agencies , all over the country ( 24 * 365 )

Already , every Agency compiles huge dossiers on " Suspects " in its own
" Departmental Database " , which is never shared with other Agencies ,
leading to ,

* Huge amount of duplication of efforts / information

* Fractured / scattered profiles of " Suspects "

* Enormous waste of time / resources

What will help ?

* Dismantling of individual departmental databases

* Merging of all Agency-wise databases into a SINGLE / UNIQUE database

* All Agencies to enter their findings / data / info into this COMMON
database , with nothing preserved on local computers

* All data-entry FORMS to be ONLINE . No paper forms at all

* All local computers connected to ultra-secure Network ( Encrypted )

* " Access Rights " to individuals , based on Biometric Identification

Will BJP want to make this , a prominent promise in their Poll-Manifesto , likely to be released on 7th April ? ( Congress / AAP missed this boat ! )

It is high time political parties stop talking of motherhood in vague terms and start telling the voters ,

" If you vote us to power , this is precisely what we will do , to bring about E-GOVERNANCE - and do it within 6 months of assuming power "

* hemen parekh ( 04 April 2014 / Mumbai ) .. > Blogs

hemen parekh
23 Nov 2015

Hemen Parekh

11 months ago

( A Mobile App called " BLACK-MAIL " )

While inaugurating the International Conference on " Networking the Networks " on Nov 2 , our FM Shri Jaitleyji said :
" Tax evasion and money laundering will become extremely difficult in the next 1-2 years, with the global automatic exchange of information system coming into effect on a real time basis "
To speed up this process and make it truly automatic / real time , I suggest resorting to the following technologies :

# Internet of Things ( IoT )

As each currency note of Rs 500 / 1000 , is getting printed , embed it with microscopic
RFID chips
Besides communicating with each other , these chips will also transmit their existence
location , through internet , to cloud-based servers of Income Tax Department
This will form a " NETWORK OF CURRENCY NOTES ( NoC ) "
You may like to call this Internet of Currency ( IoC ) , a sub-set of IoT !

# Internet Protocol Address System ( IP V 6.0 )

Each Rs 500 / 1000 currency note must be assigned ( at the time of printing ) , its own
unique Internet Address , using IP V 6.0
This IP address should be linked with the unique Serial Number printed on each note.
Since IP V 6.0 , will be capable of assigning " 2 * 10 to the power of 128 ", no of IP
addresses , there is no danger of running out of addresses , even if we decide to extend
this idea to Rs 100 currency notes !

This reform will enable the Central Government / Income Tax Department , to :

* Continuously trace the movement of each of these higher denomination currency notes
* Instantly locate any place ( using Google Map based GPS ) , where there is an
accumulation of more than Rs 1 Crore worth of currency notes
Such accumulation will be made to appear as a TAG CLOUD on the web site of IT Dept,
like thousands of balloons floating on a map of India , capable of being drilled down to
within 1 Sq Meter !
On each balloon , will appear a number announcing , " Amount of Cash here - Rs " !
This will vastly simplify the task of Anti Corruption Dept / Enforcement Dept etc

But then such transparency might lead to break-down of social order / chaos
It may be a better / safer / saner solution for such balloons / tag clouds to appear , on a secret Mobile App , available only to the officers of Enforcement Department ( ED )
You may want to call this app , " BLACK-MAIL " !

Of course , my suggestions may become outdated with the arrival of mobile wallets based CASHLESS SOCIETY , by 2030

In the meantime , should Shri Arun Jaitleyji and Shri Ravi Shankar Prasadji , want this implemented , it can be done in 6 months , at one tenth the cost of MoM ( Mars Orbital Mission ) , ie approx Rs 43 Crores

All they have to do , is to tell the bureaucracy :
" Since we need not depend upon Opposition parties to pass a bill in Rajya Sabha , please go ahead and implement this - in less than 6 months "

hemen parekh
06 Nov 2015

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